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Core Viewpoint - Alamo Group Inc. has announced the appointment of Robert P. Hureau as the new President and CEO, effective September 2, 2025, succeeding Jeffery A. Leonard, who is retiring after serving since 2021 [1][4]. Company Overview - Alamo Group is a leader in the design, manufacture, distribution, and service of high-quality equipment for vegetation management, infrastructure maintenance, and other applications [5]. - The company was founded in 1969 and has approximately 3,800 employees, operating 27 plants across North America, Europe, Australia, and Brazil as of June 30, 2025 [5]. Leadership Background - Robert P. Hureau has extensive leadership experience in the industrial and life science sectors, with a proven track record in scaling businesses and delivering significant returns [1][2]. - Prior to joining Alamo Group, Hureau served as CEO of American Trailer World, where he successfully merged two businesses, executed numerous acquisitions, and led the sale of its aftermarket parts distribution business [2][3]. - Hureau has also held executive positions at Pharmaceutical Product Development and Sensata Technologies, focusing on financial leadership [3]. Board's Perspective - The Board of Directors expressed confidence in Hureau's relevant experience and leadership capabilities to guide Alamo Group in its next growth phase [4]. - Hureau expressed enthusiasm about joining Alamo Group, highlighting the company's strong business model and talented management team [4].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $419.1 million, a slight increase from $416.3 million in Q2 2024 [9] - Gross profit was $108.3 million with a margin of 25.8%, compared to 26% in the same period last year [9] - Operating income improved to $47.1 million, with an operating margin of 11.2%, reflecting an increase of 83 basis points compared to Q2 2024 [9] - Net income rose to $31.1 million or $2.57 per diluted share, a nearly 10% increase from $28.3 million or $2.35 per diluted share in the prior year [9] Business Line Data and Key Metrics Changes - The Vegetation Management division reported net sales of $178.4 million, a 15.7% decrease compared to Q2 2024, but an 8.8% sequential improvement [11] - The Industrial Equipment division achieved record net sales of $240.7 million, representing 17.6% organic growth compared to Q2 2024 [12] - Operating income for the Industrial Equipment division was $34.3 million, or 14.3% of net sales, marking a 100 basis point improvement from the previous year [12] Market Data and Key Metrics Changes - The order backlog in the Industrial Equipment division remained strong at nearly $510 million, providing good visibility for the second half of the year [16] - Agricultural equipment sales were down compared to Q2 2024 but showed solid sequential improvement [18] - Sales of governmental mowers improved in North and South America but declined in Europe compared to the previous year [18] Company Strategy and Development Direction - The company remains optimistic about its prospects for the next several quarters, driven by sustained strength in industrial equipment markets and recovery in vegetation management markets [22] - The tuck-in acquisition of Ring O Matic was completed, which complements the company's vacuum truck and excavator product line [22] - The company is focused on maintaining a strong financial position to support ongoing initiatives and future investments [14] Management's Comments on Operating Environment and Future Outlook - Management noted that demand remains robust in the Government and Industrial Contractor segments, with improvements in operating efficiencies contributing to better earnings [15] - The company is encouraged by the recovery in the agricultural market and expects a slow build of inventory in the vegetation management division [30][41] - Management acknowledged ongoing headwinds in the agricultural sector but remains optimistic about the overall market conditions [29] Other Important Information - Total assets increased to $1.558 billion, with a reduction in accounts receivable and inventory [13] - The company reduced its total debt to $213.1 million, a significant improvement of 93.5% compared to the previous year [14] - A quarterly dividend of $0.30 per share was approved by the Board [14] Q&A Session Summary Question: Visibility on Industrial and Vegetation Management - Management expects the trend in vegetation management to continue improving for several quarters, with a slow recovery in the agricultural market [28][30] Question: Impact of Tariffs and Inflation - The biggest risk is to the snow removal group, but the company has largely mitigated tariff impacts by shifting production to the U.S. [32][33] Question: Capacity and Labor Constraints - Current capacity in existing plants is adequate, but labor constraints are being monitored closely [36] Question: Revenue and Margin Expectations for Vegetation Management - Revenue is expected to build slowly in the back half of the year, with some uncertainty in the forestry side [42][49] Question: Succession Planning - The succession process for the CEO is well advanced and expected to conclude in Q3 [50][51] Question: Capital Allocation and R&D - The company is focusing on M&A for growth, with no major new verticals planned for organic development at this time [57]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $419.1 million, a slight increase from $416.3 million in Q2 2024, reflecting solid operational performance [9] - Gross profit for the quarter was $108.3 million, with a margin of 25.8%, down from 26% in the same period last year [10] - Operating income improved to $47.1 million, with an operating margin of 11.2%, an increase of 83 basis points compared to Q2 2024 [10] - Net income rose to $31.1 million or $2.57 per diluted share, a nearly 10% increase from $28.3 million or $2.35 per diluted share in Q2 2024 [10] - Interest expense decreased by $2.4 million due to lower debt levels, contributing to improved earnings [11] - Total assets increased to $1.558 billion, with a reduction in accounts receivable and inventory [14] Business Line Data and Key Metrics Changes - The Vegetation Management division reported net sales of $178.4 million, a 15.7% decrease compared to Q2 2024, but an 8.8% sequential improvement [12] - The Industrial Equipment division achieved record net sales of $240.7 million, representing a 17.6% organic growth compared to Q2 2024 [13] - Operating income for the Industrial Equipment division was $34.3 million, or 14.3% of net sales, reflecting a 100 basis point improvement [13] - The Vegetation Management division's operating margin declined to 7.1% of net sales, while EBITDA decreased by 120 basis points compared to 2024 [22] Market Data and Key Metrics Changes - The order backlog in the Industrial Equipment division remained strong at nearly $510 million, providing good visibility for the second half of the year [18] - Second quarter order bookings in the Industrial Equipment division were up nearly 21% compared to 2024, driven by strong orders for vacuum trucks [19] - Agricultural equipment sales were down compared to 2024 but showed solid sequential improvement [20] - Sales of governmental mowers improved in North and South America but declined in Europe compared to 2024 [20] Company Strategy and Development Direction - The company remains optimistic about prospects for the next several quarters, focusing on growth in industrial equipment markets and recovery in vegetation management markets [24] - A tuck-in acquisition of Ring O Matic was completed, enhancing the company's vacuum truck and excavator product line [24] - The company is positioned to exploit an active M&A pipeline, with a focus on strategic acquisitions to accelerate growth [25] Management Comments on Operating Environment and Future Outlook - Management noted that demand remains robust in governmental and industrial contractor segments, with improvements in operating efficiencies contributing to better earnings per share [17] - The company is encouraged by the recovery in the agricultural market and expects a slow but steady improvement in vegetation management [30] - Labor constraints are a concern, with tightening labor markets being monitored closely [37] Other Important Information - The company declared a quarterly dividend of $0.30 per share, emphasizing its commitment to delivering long-term value to shareholders [15] - The effective tax rate for the quarter was approximately 24.9%, consistent with the previous year [11] Q&A Session Summary Question: Visibility on industrial market and vegetation management for Q4 - Management expects the trend of improvement in vegetation management to continue for several quarters, with a recovery in the agricultural market being better than anticipated [29][30] Question: Impact of tariffs and inflation on specific product lines - The biggest risk is to the snow removal group, but the company has mitigated this by shifting production to the U.S. Inflationary pressures on purchase prices have been manageable [33][34] Question: Capacity handling in industrial operations - Current capacity in the Wisconsin plant is adequate, with no immediate pressure to add capacity, although labor constraints are being monitored [36][37] Question: Revenue expectations for vegetation management in the back half of the year - Revenue is expected to build slowly, with some uncertainty remaining in the forestry side, but overall, a gradual improvement is anticipated [41][42] Question: Margin impacts from facility consolidation costs - Productivity improvements are expected in the second half, but unfavorable product mix in forestry may limit margin improvements in the near term [44][48] Question: Succession planning for management - The succession process is well advanced, with a conclusion expected in Q3 [49][51] Question: Capital allocation and R&D focus - The company is focusing on M&A for growth, with no major new verticals planned for organic development at this time [57]

Core Insights - Alamo Group reported strong revenue growth in Q2 2025, with GAAP revenue reaching $419.1 million, exceeding analyst expectations of $408.1 million, although diluted EPS of $2.57 fell short of the $2.71 estimate due to foreign exchange impacts [1][2][8] Financial Performance - Revenue (GAAP) for Q2 2025 was $419.1 million, a 0.7% increase from $416.3 million in Q2 2024 [2] - Diluted EPS (Non-GAAP) increased by 6.2% year-over-year from $2.42 in Q2 2024 [2] - Income from Operations (GAAP) rose to $47.1 million, an 8.8% increase from $43.3 million in the prior year [2] - Operating Margin (GAAP) improved to 11.2%, up from 10.4% in Q2 2024 [2] - Net Income (GAAP) was $31.1 million, a 9.8% increase from $28.3 million in Q2 2024 [2] Business Overview - Alamo Group designs and manufactures equipment for infrastructure maintenance, agriculture, and industrial applications, serving governmental, agricultural, and industrial customers [3] Strategic Focus - Recent strategies include acquiring complementary businesses, diversifying market reach, and launching innovative products, with a focus on cost control and supply chain resilience [4] Quarterly Performance Highlights - The Industrial Equipment Division saw a 17.6% increase in net sales to $240.7 million, driven by strong demand for vacuum trucks and snow removal equipment [5][6] - The Vegetation Management Division experienced a 15.7% decline in GAAP sales to $178.4 million year-over-year, although there was an 8.8% sequential increase compared to Q1 [7] Cost Management - Consolidated gross profit remained stable, with gross margin slightly decreasing to 25.8% [8] - SG&A expenses decreased by 6.1% to $57.1 million, contributing to an improvement in consolidated operating margin [8] Acquisition and Integration - The acquisition of Ring-O-Matic, specializing in trailer-mounted vacuum excavation equipment, is expected to enhance Alamo Group's product offerings in the Industrial Equipment segment [9] Debt Management - The company reported a significant reduction in net debt to $11.3 million, down from $175.1 million a year earlier, supporting future investments [10] Future Outlook - Management is optimistic about the second half of FY2025, citing strong backlogs and improved order trends, particularly in the Vegetation Management Division [11] - Key factors to monitor include the integration of Ring-O-Matic and recovery in agricultural and forestry equipment demand [12]

Group 1: Earnings Performance - Alamo Group reported quarterly earnings of $2.57 per share, missing the Zacks Consensus Estimate of $2.69 per share, but showing an increase from $2.35 per share a year ago [1] - The earnings surprise for the quarter was -4.46%, while the previous quarter saw a positive surprise of +13.73% with actual earnings of $2.65 compared to an expected $2.33 [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times [2] Group 2: Revenue Performance - The company posted revenues of $419.07 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 4.07% and slightly up from $416.3 million year-over-year [3] - Alamo Group has topped consensus revenue estimates only once over the last four quarters [3] Group 3: Stock Performance and Outlook - Alamo Group shares have increased approximately 21.6% since the beginning of the year, outperforming the S&P 500's gain of 7.1% [4] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters [5] - The estimate revisions trend for Alamo Group was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] Group 4: Industry Context - The Manufacturing - Farm Equipment industry, to which Alamo Group belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, which may impact stock performance [9] - Another company in the same industry, Deere, is expected to report a significant year-over-year earnings decline of -26.6% in its upcoming results [10][11]

PART I. [FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited interim condensed consolidated financial statements and management's discussion and analysis [Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited interim condensed consolidated financial statements, including statements of income, comprehensive income, balance sheets, stockholders' equity, and cash flows for Alamo Group Inc. and its subsidiaries. It also includes detailed notes explaining the basis of presentation, recent business combinations, accounting policies for receivables, inventories, rental equipment, fair value measurements, goodwill and intangible assets, leases, debt, common stock and dividends, earnings per share, revenue and segment information, accumulated other comprehensive loss, and subsequent events [Interim Condensed Consolidated Statements of Income](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Income) This statement presents the company's revenues, expenses, and net income over specific interim periods Income Statement Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $419,073 | $416,303 | $810,023 | $841,889 | | Cost of sales | $310,781 | $308,122 | $598,890 | $622,076 | | Gross profit | $108,292 | $108,181 | $211,133 | $219,813 | | Income from operations| $47,078 | $43,309 | $91,540 | $90,288 | | Net Income | $31,106 | $28,324 | $62,906 | $60,444 | | Basic EPS | $2.59 | $2.36 | $5.24 | $5.05 | | Diluted EPS | $2.57 | $2.35 | $5.21 | $5.02 | | Dividends declared | $0.30 | $0.26 | $0.60 | $0.52 | [Interim Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement details net income and other comprehensive income components, leading to total comprehensive income Comprehensive Income Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $31,106 | $28,324 | $62,906 | $60,444 | | Other comprehensive income (loss), net of tax | $27,616 | $(5,179) | $37,174 | $(11,638) | | Comprehensive income | $58,722 | $23,145 | $100,080 | $48,806 | - Foreign currency translation adjustments significantly contributed to other comprehensive income in 2025, with a gain of **$28,062 thousand** for the three months and **$38,883 thousand** for the six months ended June 30, 2025, compared to losses in the prior year periods[12](index=12&type=chunk) [Interim Condensed Consolidated Balance Sheets](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific interim dates Balance Sheet Summary | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $201,823 | $197,274 | | Accounts receivable, net | $356,236 | $305,561 | | Inventories, net | $372,074 | $343,363 | | Total current assets | $942,594 | $857,495 | | Total assets | $1,557,649 | $1,450,279 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Trade accounts payable | $111,820 | $84,505 | | Total current liabilities | $206,906 | $190,309 | | Long-term debt and finance lease obligations, net of current maturities | $198,115 | $205,473 | | Total liabilities | $442,253 | $432,025 | | Total stockholders' equity | $1,115,396 | $1,018,254 | [Interim Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement outlines changes in the company's equity accounts, including net income, dividends, and other comprehensive income - Total stockholders' equity increased from **$1,018,254 thousand** at December 31, 2024, to **$1,115,396 thousand** at June 30, 2025, primarily driven by net income and other comprehensive income, partially offset by dividends paid[17](index=17&type=chunk) Stockholders' Equity Summary | Component (in thousands) | Balance at Dec 31, 2024 | Other comprehensive income | Stock-based compensation expense | Stock-based compensation transactions | Dividends paid | Balance at June 30, 2025 | | :----------------------- | :---------------------- | :------------------------- | :------------------------------- | :------------------------------------ | :------------- | :----------------------- | | Common Stock (Amount) | $1,202 | — | — | $1 | — | $1,206 | | Additional Paid-in Capital | $146,866 | — | $4,670 | $(416) | — | $151,120 | | Retained Earnings | $956,347 | $62,906 | — | — | $(7,196) | $1,012,057 | | Accumulated Other Comprehensive Loss | $(81,595) | $37,174 | — | — | — | $(44,421) | | Total Stockholders' Equity | $1,018,254 | $100,080 | $4,670 | $(416) | $(7,196) | $1,115,396 | [Interim Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities for interim periods Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $36,911 | $34,316 | | Net cash used in investing activities | $(29,730) | $(10,265) | | Net cash (used in) provided by financing activities | $(15,112) | $47,173 | | Net change in cash and cash equivalents | $4,549 | $66,616 | | Cash and cash equivalents at end of the period | $201,823 | $118,535 | - Investing activities saw a significant increase in cash usage, primarily due to acquisitions (**$17.6 million**) in the first six months of 2025, compared to no acquisitions in the same period of 2024[23](index=23&type=chunk) [Notes to Interim Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the interim condensed consolidated financial statements [1. Basis of Financial Statement Presentation](index=9&type=section&id=1.%20Basis%20of%20Financial%20Statement%20Presentation) This note describes the accounting principles and presentation methods used for the interim financial statements - The interim financial statements are prepared in accordance with U.S. GAAP for interim information and Form 10-Q, and do not include all disclosures required for complete annual financial statements[24](index=24&type=chunk) - New accounting pronouncements, ASU No. 2023-09 (Improvements to Income Tax Disclosures) and ASU No. 2024-03 (Expense Disaggregation Disclosures), are effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively, and will require additional disclosures upon adoption[25](index=25&type=chunk)[26](index=26&type=chunk) [2. Business Combinations](index=9&type=section&id=2.%20Business%20Combinations) This note details recent acquisitions and their financial impact on the consolidated entity - On June 30, 2025, Alamo Group Inc. acquired 100% of Ring-O-Matic, LLC for approximately **$17.6 million** to expand product offerings and achieve synergies within the Industrial Equipment division[27](index=27&type=chunk) [3. Accounts Receivable](index=9&type=section&id=3.%20Accounts%20Receivable) This note provides information on the composition of accounts receivable and related reserves Accounts Receivable Reserves | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Reserves for sales discounts | $12,100 | $14,200 | [4. Inventories](index=10&type=section&id=4.%20Inventories) This note details the breakdown of inventory components and associated obsolescence reserves Inventory Components and Reserves | Inventory Component (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Finished goods | $344,217 | $317,169 | | Work in process | $21,996 | $21,310 | | Raw materials | $5,861 | $4,884 | | Inventories, net | $372,074 | $343,363 | | Inventory obsolescence reserves | $9,900 | $8,300 | [5. Rental Equipment](index=10&type=section&id=5.%20Rental%20Equipment) This note outlines the accounting for rental equipment and related depreciation expenses Rental Equipment Depreciation | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $2,900 | $2,500 | $5,800 | $4,800 | [6. Fair Value Measurements](index=10&type=section&id=6.%20Fair%20Value%20Measurements) This note explains the company's use of derivative instruments and fair value accounting for financial assets and liabilities - The Company uses derivative instruments, specifically interest rate swaps, to partially offset exposure to market risks like changes in foreign currencies and interest rates, not for trading purposes[32](index=32&type=chunk)[33](index=33&type=chunk) Derivative Liabilities and Swaps | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Fair value of derivative liabilities | $1,900 | $(800) (asset) | | Notional amount of outstanding swap agreements | $263,800 | N/A | [7. Goodwill and Intangible Assets](index=11&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) This note provides details on the carrying amounts and changes in goodwill and other intangible assets Goodwill and Intangible Assets Summary | Goodwill (in thousands) | December 31, 2024 | Translation adjustment | Goodwill acquired | June 30, 2025 | | :---------------------- | :---------------- | :--------------------- | :---------------- | :------------ | | Vegetation Management | $126,729 | $3,260 | — | $129,989 | | Industrial Equipment | $76,298 | $1,689 | $13,631 | $91,618 | | Consolidated | $203,027 | $4,949 | $13,631 | $221,607 | Goodwill and Intangible Assets Summary | Intangible Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Total net definite-lived | $139,540 | $145,860 | | Total indefinite-lived | $5,500 | $5,500 | | Total Intangible Assets | $145,040 | $151,360 | [8. Leases](index=11&type=section&id=8.%20Leases) This note describes the company's lease arrangements, including lease costs and liabilities Lease Cost and Liabilities | Lease Cost Component (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Finance lease cost | $2 | $2 | $4 | $4 | | Operating lease cost | $1,948 | $1,802 | $3,827 | $3,464 | | Short-term lease cost | $295 | $395 | $976 | $870 | | Variable lease cost | $54 | $78 | $108 | $151 | | Total lease cost | $2,299 | $2,277 | $4,915 | $4,489 | Lease Cost and Liabilities | Operating Lease Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------- | :------------ | :---------------- | | Total operating lease liabilities | $17,537 | $18,277 | | Weighted Average Remaining Lease Term | 3.41 years | 3.49 years | | Weighted Average Discount Rate | 4.63 % | 4.57 % | [9. Debt](index=13&type=section&id=9.%20Debt) This note details the company's debt structure, including term debt, finance lease obligations, and available credit Debt Structure | Debt Component (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Term debt | $213,112 | $220,475 | | Finance lease obligations | $3 | $6 | | Total debt | $213,115 | $220,481 | | Less current maturities | $15,000 | $15,008 | | Total long-term debt | $198,115 | $205,473 | - As of June 30, 2025, the Company had **$397.3 million** in available borrowings under its revolving credit facility, with **$2.7 million** committed to standby letters of credit[41](index=41&type=chunk) [10. Common Stock and Dividends](index=13&type=section&id=10.%20Common%20Stock%20and%20Dividends) This note provides information on common stock, dividend declarations, and payments Dividends Declared and Paid | Dividends Per Share | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Declared | $0.30 | $0.26 | $0.60 | $0.52 | | Paid | $0.30 | $0.26 | $0.60 | $0.52 | - On July 1, 2025, the Board of Directors declared a quarterly cash dividend of **$0.30 per share**, paid on July 29, 2025[42](index=42&type=chunk) [11. Earnings Per Share](index=13&type=section&id=11.%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share Earnings Per Share Data | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $2.59 | $2.36 | $5.24 | $5.05 | | Diluted EPS| $2.57 | $2.35 | $5.21 | $5.02 | [12. Revenue and Segment Information](index=14&type=section&id=12.%20Revenue%20and%20Segment%20Information) This note provides a detailed breakdown of revenue by product type, geographical location, and segment performance Revenue by Product Type | Revenue by Product Type (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Wholegoods | $339,095 | $328,120 | $652,235 | $671,698 | | Parts | $63,044 | $71,579 | $124,420 | $141,080 | | Other | $16,934 | $16,604 | $33,368 | $29,111 | | Consolidated | $419,073 | $416,303 | $810,023 | $841,889 | Revenue by Geographical Location | Revenue by Geographical Location (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $307,347 | $295,187 | $582,820 | $588,989 | | Canada | $32,823 | $30,792 | $71,922 | $69,678 | | France | $22,214 | $23,193 | $43,962 | $49,365 | | United Kingdom | $21,226 | $20,167 | $42,701 | $44,378 | | Brazil | $10,512 | $11,320 | $19,892 | $23,524 | | Netherlands | $5,278 | $10,852 | $10,962 | $21,196 | | Australia | $3,276 | $7,055 | $8,951 | $11,559 | | Germany | $2,070 | $2,357 | $3,502 | $5,176 | | Other | $14,327 | $15,380 | $25,311 | $28,024 | | Consolidated | $419,073 | $416,303 | $810,023 | $841,889 | Segment Performance (Three Months) | Segment Performance (in thousands) | 3M Ended June 30, 2025 Net Sales | 3M Ended June 30, 2024 Net Sales | 3M Ended June 30, 2025 Income from Operations | 3M Ended June 30, 2024 Income from Operations | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------------ | :------------------------------------ | | Vegetation Management | $178,358 | $211,535 | $12,751 | $16,006 | | Industrial Equipment | $240,715 | $204,768 | $34,327 | $27,303 | | Consolidated | $419,073 | $416,303 | $47,078 | $43,309 | Segment Performance (Six Months) | Segment Performance (in thousands) | 6M Ended June 30, 2025 Net Sales | 6M Ended June 30, 2024 Net Sales | 6M Ended June 30, 2025 Income from Operations | 6M Ended June 30, 2024 Income from Operations | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------------ | :------------------------------------ | | Vegetation Management | $342,248 | $435,282 | $26,063 | $37,685 | | Industrial Equipment | $467,775 | $406,607 | $65,477 | $52,603 | | Consolidated | $810,023 | $841,889 | $91,540 | $90,288 | [13. Accumulated Other Comprehensive Loss](index=17&type=section&id=13.%20Accumulated%20Other%20Comprehensive%20Loss) This note explains the components and changes in accumulated other comprehensive loss - Accumulated other comprehensive loss improved significantly, decreasing from **$(81,595) thousand** at the beginning of the six-month period to **$(44,421) thousand** at June 30, 2025, primarily due to positive foreign currency translation adjustments[54](index=54&type=chunk) [14. Subsequent Events](index=17&type=section&id=14.%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period but before the financial statements were issued - On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, which includes tax reform proposals that could impact the Company's deferred tax liabilities and assets. The Company is currently evaluating the expected financial statement impact[55](index=55&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition, highlighting key trends, operational results for both the three and six months ended June 30, 2025, compared to the prior year. It also discusses liquidity, capital resources, critical accounting estimates and policies, off-balance sheet arrangements, and forward-looking information, including associated risks and uncertainties [Overview](index=18&type=section&id=Overview) This overview summarizes the company's divisional performance, key financial metrics, and backlog for the reporting period - The Industrial Equipment Division experienced strong demand, achieving **15% organic growth** in net sales for the first six months of 2025, driven by excavators, vacuum trucks, and snow removal[58](index=58&type=chunk)[61](index=61&type=chunk) - The Vegetation Management Division faced weaker market conditions in forestry, tree care, and agriculture, leading to a **21% decline** in net sales for the first six months of 2025. Despite cost reduction actions, operational inefficiencies from factory consolidations impacted income[58](index=58&type=chunk)[60](index=60&type=chunk) Key Financial Metrics | Metric | Six Months Ended June 30, 2025 | Change YoY | | :----- | :----------------------------- | :--------- | | Net Sales | -4% | | | Income from Operations | +1% | | | Net Income | +4% | | | Consolidated Backlog | $687.2 million | -11% | [Results of Operations](index=19&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing results for the three and six months ended June 30, 2025, against the prior year [Three Months Ended June 30, 2025 vs. Three Months Ended June 30, 2024](index=19&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20vs.%20Three%20Months%20Ended%20June%2030,%202024) This subsection compares the company's financial performance for the second quarter of 2025 against the same period in 2024 Quarterly Performance Comparison | Metric (in thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Net sales | $419,073| $416,303| $2,770 | 1% | | Vegetation Management sales | $178,358| $211,535| $(33,177) | -16% | | Industrial Equipment sales | $240,715| $204,768| $35,947 | 18% | | Gross profit | $108,292| $108,181| $111 | 0% | | SG&A expenses | $57,136 | $60,817 | $(3,681) | -6% | | Interest expense | $3,684 | $6,098 | $(2,414) | -40% | | Net Income | $31,106 | $28,324 | $2,782 | 10% | | Diluted EPS | $2.57 | $2.35 | $0.22 | 9% | - Other income (expense), net, shifted from a minor expense of **$0.1 million** in Q2 2024 to an expense of **$3.2 million** in Q2 2025, primarily due to unfavorable currency exchange rates[69](index=69&type=chunk) [Six Months Ended June 30, 2025 vs. Six Months Ended June 30, 2024](index=19&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20vs.%20Six%20Months%20Ended%20June%2030,%202024) This subsection compares the company's financial performance for the first six months of 2025 against the same period in 2024 Half-Year Performance Comparison | Metric (in thousands) | 6M 2025 | 6M 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Net sales | $810,023| $841,889| $(31,866) | -4% |\ | Vegetation Management sales | $342,248| $435,282| $(93,034) | -21% |\ | Industrial Equipment sales | $467,775| $406,607| $61,168 | 15% |\ | Gross profit | $211,133| $219,813| $(8,680) | -4% |\ | SG&A expenses | $111,466| $121,411| $(9,945) | -8% |\ | Interest expense | $6,878 | $12,189 | $(5,311) | -44% |\ | Net Income | $62,906 | $60,444 | $2,462 | 4% |\ | Diluted EPS | $5.21 | $5.02 | $0.19 | 4% | - Gross profit margin remained flat at **26%** for both periods, despite lower sales volume and production inefficiencies in Vegetation Management, indicating effective cost management[74](index=74&type=chunk) - Other income (expense), net, shifted from a minor income in 6M 2024 to an expense of **$3.8 million** in 6M 2025, primarily due to unfavorable currency exchange rates[76](index=76&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) This section evaluates the company's ability to generate and manage cash, detailing working capital, cash flow activities, and debt facilities Working Capital and Cash Equivalents | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Working capital | $735,700 | $667,200 | | Cash and cash equivalents held by foreign subsidiaries | $146,700 | N/A | Cash Flow Activities | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Capital expenditures | $13,000 | $11,100 | | Net cash used in investing activities | $29,700 | $10,300 | | Net cash used in financing activities | $15,100 | $(47,200) (provided) | - The Company expects full-year 2025 capital expenditures to be between **$30.0 million** and **$35.0 million**, funded by operating cash flows or the revolving credit facility[80](index=80&type=chunk) - As of June 30, 2025, **$213.8 million** was outstanding under the Term Facility of the 2022 Credit Agreement, with **$397.3 million** available under the Revolver Facility. The Company is in compliance with all covenants[84](index=84&type=chunk) [Critical Accounting Estimates](index=21&type=section&id=Critical%20Accounting%20Estimates) This section highlights accounting estimates that require significant judgment and can materially impact financial statements - Management's financial statements rely on estimates and assumptions that affect reported amounts, with actual results potentially differing under various conditions[87](index=87&type=chunk) [Critical Accounting Policies](index=21&type=section&id=Critical%20Accounting%20Policies) This section outlines the accounting policies that are most important to the company's financial reporting and require complex judgments - The accounting policies related to business combinations involve a higher degree of judgment and complexity, with no material changes to the nature of estimates or assumptions since the 2024 Form 10-K[89](index=89&type=chunk) [Off-Balance Sheet Arrangements](index=22&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any transactions, agreements, or other contractual arrangements that are not recorded on the balance sheet but could have a material financial impact - There are no off-balance sheet arrangements that have or are likely to have a current or future material effect on the Company's financial condition[90](index=90&type=chunk) [Forward-Looking Information](index=22&type=section&id=Forward-Looking%20Information) This section provides cautionary statements regarding future-oriented information, outlining potential risks and uncertainties that could cause actual results to differ - The report contains forward-looking statements based on current expectations, and actual results may differ due to various risks and uncertainties, including market conditions, competition, raw material prices, governmental policies, and cybersecurity risks[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, as management cannot predict all risk factors or their impact, and the Company does not undertake to update these statements[94](index=94&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) This section details the Company's exposure to market risks, specifically foreign currency risk and interest rate risk. It explains how these risks arise from international operations and variable-rate debt, and provides sensitivity analyses to illustrate potential financial impacts [Foreign Currency Risk](index=23&type=section&id=Foreign%20Currency%20Risk) This subsection describes the company's exposure to fluctuations in foreign currency exchange rates due to international operations - The Company is exposed to foreign currency risk due to international manufacturing and sales activities, primarily in Europe and Canada, where financial results can be affected by exchange rate fluctuations[96](index=96&type=chunk)[98](index=98&type=chunk) - A uniform **10% strengthening or decrease** in the U.S. dollar's value relative to sales-denominated currencies would result in a **$6.4 million** change in gross profit for the six months ended June 30, 2025[100](index=100&type=chunk) - Foreign currency translation adjustments increased stockholders' equity by **$28.1 million** in the current quarter[97](index=97&type=chunk) [Interest Rate Risk](index=24&type=section&id=Interest%20Rate%20Risk) This subsection details the company's exposure to changes in interest rates, primarily affecting its variable-rate debt - The Company's net income is affected by changes in interest rates due to its long-term debt bearing variable rates[101](index=101&type=chunk) - A **two percentage point change** in the average interest rate on variable-rate borrowings would alter the Company's interest expense by approximately **$1.1 million** for the second quarter of 2025[101](index=101&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and states that there have been no material changes in internal control over financial reporting during the last fiscal year [Disclosure Controls and Procedures](index=24&type=section&id=Disclosure%20Controls%20and%20Procedures) This subsection confirms the effectiveness of the company's disclosure controls and procedures as evaluated by management - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of the end of the reporting period[102](index=102&type=chunk) [Changes in internal control over financial reporting](index=24&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting) This subsection reports on any material changes in the company's internal control over financial reporting during the last fiscal year - There have been no material changes in the Company's internal control over financial reporting during the last fiscal year[103](index=103&type=chunk) PART II. [OTHER INFORMATION](index=23&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional legal, risk, equity, and control information not covered in the financial statements [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the Company's annual report on Form 10-K for a description of legal proceedings - For a description of legal proceedings, refer to the consolidated financial statements and footnotes in the Company's annual report on Form 10-K for the year ended December 31, 2024[104](index=104&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Company's 2024 Form 10-K - There have been no material changes from the risk factors previously disclosed in the 2024 Form 10-K for the year ended December 31, 2024[105](index=105&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no repurchases of common stock under the Company's share repurchase program during the quarter ended June 30, 2025 - No repurchases of common stock were made under the share repurchase program during the quarter ended June 30, 2025[106](index=106&type=chunk) [Item 3. Defaults Upon Senior Securities](index=24&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities - There were no defaults upon senior securities[107](index=107&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine Safety Disclosures are not applicable[108](index=108&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) This section confirms that no reports on Form 8-K were filed and no directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the reporting period - No reports on Form 8-K were filed during the period[108](index=108&type=chunk) - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the period covered by this report[109](index=109&type=chunk) [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications, XBRL documents, and the 2025 Incentive Stock Option Plan - Exhibits include certifications by Jeffery A. Leonard and Agnieszka K. Kamps under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, XBRL Instance Document, Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents, and the Cover Page Interactive Data File[110](index=110&type=chunk) - The 2025 Incentive Stock Option Plan is incorporated by reference from Form DEF 14A filed on March 13, 2025[110](index=110&type=chunk) [SIGNATURES](index=26&type=section&id=SIGNATURES) This section contains the official signatures of the Company's President & Chief Executive Officer and Executive Vice President & Chief Financial Officer, certifying the filing of the report - The report is signed by Jeffery A. Leonard, President & Chief Executive Officer, and Agnieszka K. Kamps, Executive Vice President & Chief Financial Officer, on August 6, 2025[111](index=111&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Key Financial and Operational Highlights](index=1&type=section&id=Key%20Financial%20and%20Operational%20Highlights) Alamo Group Inc. reported strong Q2 2025 operating results, with modest net sales growth, significant improvements in operating and net income, robust Industrial Equipment Division growth, and reduced net debt Q2 2025 Key Financial Highlights | Metric | Q2 2025 Value | YoY Change | QoQ Change | | :-------------------------------- | :------------ | :--------- | :--------- | | Net Sales | $419.1 million| +0.7% | +7.2% | | Industrial Equipment Division Sales | $240.7 million| +17.6% | +6.0% | | Vegetation Management Division Sales| $178.4 million| -15.7% | +8.8% | | Income from Operations | $47.1 million | +83 bps | N/A | | Net Income | $31.1 million | +9.8% | N/A | | Fully Diluted EPS | $2.57 | +$0.22 | N/A | | Total Debt Net of Cash | $11.3 million | -93.5% | N/A | | Backlog | $687.2 million| +2.8% | N/A | - EPS results for the quarter include an unfavorable currency revaluation impact of **$0.21 per share**[3](index=3&type=chunk) [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%20Results) [Consolidated Results](index=2&type=section&id=Consolidated%20Results) Alamo Group reported slight Q2 2025 consolidated net sales growth, improved operating income from cost reductions, and healthy net income and diluted EPS growth Consolidated Financial Performance (Q2 2025 vs. Q2 2024, in millions) | Metric | Q2 2025 (million) | Q2 2024 (million) | Change (YoY) | | :----------------------- | :---------- | :---------- | :----------- | | Net Sales | $419.1 | $416.3 | +0.7% | | Gross Profit | $108.3 | $108.2 | +0.1% | | Gross Margin | 25.8% | 26.0% | -0.2 ppts | | SG&A Expenses | $57.1 | $60.8 | -6.1% | | Income from Operations | $47.1 | $43.3 | +8.8% | | Operating Margin | 11.2% | 10.4% | +0.83 ppts | | Net Income | $31.1 | $28.3 | +9.8% | | Diluted EPS | $2.57 | $2.35 | +$0.22 | - Q2 EPS included an unfavorable impact to net income of **$2.5 million**, or approximately **$0.21 per share**, primarily due to the revaluation of US dollar-denominated monetary assets held in Canadian entities[5](index=5&type=chunk) - SG&A expenses declined by **6.1%** compared to Q2 2024, reflecting successful cost reduction efforts completed in 2024[4](index=4&type=chunk) [Divisional Performance](index=2&type=section&id=Divisional%20Performance) Industrial Equipment Division showed strong organic growth and improved margins; Vegetation Management Division saw YoY sales decline but sequential recovery, with margins impacted by consolidation Divisional Sales and Operating Margin (Q2 2025 vs. Q2 2024, in millions) | Division | Q2 2025 Sales (million) | Q2 2024 Sales (million) | YoY Change | QoQ Change | Q2 2025 Operating Margin | Q2 2024 Operating Margin | YoY Margin Change | | :----------------------- | :------------ | :------------ | :--------- | :--------- | :----------------------- | :----------------------- | :---------------- | | Industrial Equipment | $240.7 | $204.8 | +17.6% | +6.0% | 14.3% | 13.4% | +0.93 ppts | | Vegetation Management | $178.4 | $211.5 | -15.7% | +8.8% | 7.1% | 7.6% | -0.5 ppts | - The Vegetation Management Division's operating margin of **7.1%** included costs associated with manufacturing facility consolidations[4](index=4&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) The company maintained a strong balance sheet, reducing inventory, improving accounts receivable days outstanding, and generating positive year-to-date operating cash flow Key Balance Sheet and Cash Flow Metrics (Q2 2025 vs. Q2 2024, in millions) | Metric | Q2 2025 (million) | Q2 2024 (million) | Change (YoY) | | :------------------------- | :---------- | :---------- | :----------- | | Accounts Receivable | $356.2 | $388.5 | -8.4% | | DSO | 81 days | 84 days | -3 days | | Inventory | $372.1 | $385.1 | -3.4% | | Operating Cash Flow (YTD) | $36.9 | N/A | N/A | | Cash & Cash Equivalents | $201.8 | $118.5 | +70.3% | | Total Debt Net of Cash | $11.3 | $175.1 | -93.5% | - The company's backlog at the end of Q2 2025 was **$687.2 million**, with Industrial Equipment at **$509.6 million** and Vegetation Management at **$177.6 million**[6](index=6&type=chunk) [Management Commentary & Business Outlook](index=3&type=section&id=Comments%20on%20Results) [CEO's Review of Q2 Performance](index=3&type=section&id=CEO's%20Review%20of%20Q2%20Performance) CEO Jeff Leonard highlighted improved Q2 operating margin, driven by strong Industrial Equipment demand and sequential recovery in Vegetation Management, with modest consolidated net sales growth - Industrial Equipment Division's net sales rose nearly **18%** compared to the same period last year, with sales of vacuum trucks and snow removal equipment increasing more than **20%** due to healthy demand and market share gains[10](index=10&type=chunk) - Vegetation Management Division's net sales were down approximately **16%** YoY but rose nearly **9%** sequentially, with order volumes increasing for the fifth consecutive quarter[11](index=11&type=chunk) - Consolidated operating margin improved by **83 basis points** from Q2 2024 to **11.2%**, with growth in the Industrial Equipment Division and greater factory efficiencies offsetting early-quarter softness in Vegetation Management[12](index=12&type=chunk) [Strategic Initiatives & Acquisitions](index=3&type=section&id=Strategic%20Initiatives%20%26%20Acquisitions) Alamo Group expanded its product portfolio and market share by acquiring Ring-O-Matic, a manufacturer of industrial vacuum excavation equipment, funded with existing cash - Acquired Ring-O-Matic, a manufacturer of industrial vacuum excavation equipment specializing in trailer-mounted units, aligning with the strategic focus on expanding market share and strengthening the product portfolio[13](index=13&type=chunk) - The acquisition was funded with existing cash on hand and will be part of the Excavator and Vacuum Trucks group[13](index=13&type=chunk) [Outlook](index=4&type=section&id=Outlook) The company anticipates continued strong Industrial Equipment Division performance and further Vegetation Management Division improvement, leveraging its strong balance sheet for growth - Anticipates continued strong performance from the Industrial Equipment Division through at least the end of the year and into 2026[14](index=14&type=chunk) - The Vegetation Management Division is poised for further improvement, driven by stronger order flow supported by enhanced operational gains following the completion of plant consolidations[14](index=14&type=chunk) - The company expects to leverage its strong balance sheet to accelerate both organic and inorganic growth, while remaining mindful of ongoing global trade uncertainty[14](index=14&type=chunk) [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) [Earnings Conference Call Details](index=4&type=section&id=Earnings%20Conference%20Call%20Details) Alamo Group Inc. hosted a Q2 earnings conference call on August 7, 2025, with replay and online archive available - A conference call to discuss Q2 results was held on Thursday, August 7, 2025, at 8:30 a.m. ET[15](index=15&type=chunk) - A replay was available until Thursday, August 21, 2025, via phone and archived on the Company's website for 60 days[15](index=15&type=chunk)[16](index=16&type=chunk) [About Alamo Group](index=4&type=section&id=About%20Alamo%20Group) Alamo Group, founded in 1969, is a leading global provider of equipment for vegetation management and infrastructure maintenance, operating 27 plants with 3,800 employees - Alamo Group is a leader in the design, manufacture, distribution, and service of high-quality equipment for vegetation management, infrastructure maintenance, and other applications[17](index=17&type=chunk) - Products include truck and tractor mounted mowing equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, industrial equipment, agricultural implements, forestry equipment, and related after-market parts and services[17](index=17&type=chunk) - Founded in 1969, the company has approximately **3,800 employees** and operates **27 plants** in North America

Core Insights - Alamo Group Inc. reported a modest increase in net sales for Q2 2025, reaching $419.1 million, a 0.7% increase from $416.3 million in Q2 2024, with a notable performance in the Industrial Equipment Division [3][8][9] - The company experienced a 9.8% year-over-year increase in net income, amounting to $31.1 million, or $2.57 per diluted share, driven by improved operating results despite currency revaluation impacts [4][8][9] - The company's backlog at the end of Q2 2025 was $687.2 million, indicating a healthy demand outlook, with the Industrial Equipment Division backlog at $509.6 million [5][8][9] Financial Performance - Q2 2025 gross profit was $108.3 million, representing 25.8% of net sales, slightly down from 26.0% in Q2 2024 [3][8] - Selling, general and administrative (SG&A) expenses decreased by 6.1% to $57.1 million, or 13.6% of net sales, reflecting successful cost reduction efforts [3][8] - The Industrial Equipment Division achieved net sales of $240.7 million, a 17.6% organic growth compared to Q2 2024, while the Vegetation Management Division saw a decline of 15.7% to $178.4 million [3][8][10] Operational Highlights - The company's operating income for Q2 2025 was $47.1 million, or 11.2% of net sales, marking an improvement of 83 basis points from the previous year [3][8][12] - The Industrial Equipment Division's operating margin improved to 14.3%, up 93 basis points year-over-year, driven by strong demand and market share gains [3][10][12] - The Vegetation Management Division's operating margin was 7.1%, impacted by costs associated with manufacturing facility consolidations [3][11][12] Strategic Developments - Alamo Group welcomed Ring-O-Matic into its portfolio, enhancing its product offerings in industrial vacuum excavation equipment, funded by existing cash [13] - The company anticipates continued operational gains, particularly in the Industrial Equipment Division, while the Vegetation Management Division is expected to improve following recent consolidations [7][14] - The balance sheet remains strong, with cash and cash equivalents of $201.8 million and total debt reduced to $213.1 million, net of cash [6][8][29]

Core Viewpoint - Alamo Group (ALG) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a strong trend of surpassing expectations in recent quarters [1][6]. Earnings Performance - Alamo Group has consistently exceeded earnings estimates, with an average surprise of 10.45% over the last two quarters [2]. - In the last reported quarter, the company achieved earnings of $2.65 per share, surpassing the Zacks Consensus Estimate of $2.33 per share by 13.73% [3]. - For the previous quarter, Alamo Group's earnings were $2.39 per share against an expected $2.23 per share, resulting in a surprise of 7.17% [3]. Earnings Estimates and Predictions - The company's earnings estimates have been trending higher, supported by its history of earnings surprises [6]. - Alamo Group currently has a positive Earnings ESP of +2.05%, indicating increased analyst optimism regarding its near-term earnings potential [9]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a strong likelihood of another earnings beat in the upcoming report [9]. Earnings ESP Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [7]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions prior to earnings releases [8].